India’s situation in the global setting

Why every politicians and business people wants foreign direct investment should come to India to partner with local companies in the sectors of- banking and insurance, information technology, automobile, pharmaceuticals, etc? The answer is India has currently the right setting in terms of- natural resources and eco-system. It seems it has an ever increasing talent pool. India is craving to get its talent pool tested. It is looking in all directions to seek how the people can get gainfully working. India is the second biggest market after china, so we have big demand for everything. It seems we know how to fulfill the demands, but it seems initial capital is what is needed to get the ball rolling. The foreign direct investment can fuel the Indian growth, combined with the development minded politicians, bureaucrats, and growth friendly policies will put India on track to becoming a very strong global player.

Has the global-network business increase spreading of recession?

I would say yes. The idea of value chain helps in explaining this. Let try to explain this at the level of companies. Companies that are connected globally and doing business by extracting the value of the network has to be careful. The connected has many obvious advantages as well some disadvantages. In the network the problem can arise at the node or in its links.
Just to emphasize the point I would like to create an analogy to the virus attack (I can’t help thinking of this analogy, with so many types of virus attacks in the last decade). Let me call this virus the recession virus. The recession virus as all other in my opinion is very infectious. The probability that one gets affected depends on the link strength between node already affected by recession and other nodes in the network.
A classic example is the IT industry here in Bangalore, where I live and work. The dominance of IT business in Bangalore has been undoubtedly because of our strong partnership with companies in the US. As the US economy slowed down and got into recession the IT companies in Bangalore have started to feel the heat. IT companies in Bangalore need to find ways to keep the temperature at a comfortable level, else these companies will soon end up as hard boiled eggs.
So, in doing global business it is very important to clearly understand the impact of the network. There is a clear need for provisioning risk mitigation to insulate from the recession virus.

Will globalization benefit India?

In some sense, everyone benefits out of globalization, as it lifts the level of competition forcing everyone to deliver at a certain minimum level, below which the service or product will not survive. When this happens there is an automatic course correction and improved quality of the services and products.
For India to derive maximum out of the globalization, the Government needs to start promoting their work horses (90% of the population) and thinkers (10% of the population). Provide more opportunities for entrepreneurship by coming up with friendly policies and anti-corruption.

Who will benefit maximum out of globalization?

Clearly the developed countries are at an advantage from globalization. They have been able to hold to the advantageous positions. However, in the last 10 years countries from Asia seem to be catching up at a very fast rate with regard to economic growth. Some of these countries are well on their way to dislodge from higher positions the not well performing European countries. China, India, Korea have done extremely well to bridge some the gaps of product and service quality.
In all these, the leading beneficiaries of globalization have to recognize that in the era of globalization, we will either succeed together in building a more prosperous world, or we will suffer together as we each lose ground.

Why benchmark?

In a global world for companies to succeed in business they need to have the necessary infrastructure and people to be able to scale and sustain. Having this seems to be the key drivers for growth. But this is not good enough, as one need to qualify the kind of infrastructure and people the company has. Hence, the companies need to benchmark. They need to benchmark with regard to growth and performance with the rest of the world and keep in pace with it, so as to be not left behind.
A word of caution benchmarking helps to know where you are in relation with others, however to lead there is always something more and different one needs to do.

Has globalization benefited companies and people?

Globalization has definitely benefited companies. Companies can extend their range and reach in terms of markets and production facilities to national, multinational, and international levels.

Companies have benefited due to globalization in terms of increase in the power, profits, and productivity of when they have strategically chosen among many nations for their sources of materials, production facilities, and markets, by quickly adjusting to changing market conditions.

People have benefited due to globalization as it has involved greater openness in the international economy, an integration of markets on a worldwide basis, and a movement toward a borderless world, all of which have yielded an increases in quantity and quality of products and services.

How long will globalization continue?

There is enough literature saying that- Globalization is ever increasing. This in turn has increased competition for companies generating both losers and winners in the process; it has also increased market share and profitability. Globalization has helped to improve the economy of countries.
While there are also literature which says that globalization will continue as countries and companies aspire for improved economics. The question i have is, will this continue forever, if not how long will this continue?